2011 Nonwovens Sales: $239 million
Key Personnel: Marko Rajamaa, senior vice president, Nonwovens; Michael Brown, nonwovens sales manager—Americas and Far East; Norbert Busch, nonwovens sales manager—Europe and Middle East
Plants: North Carolina; Steinfurt, Germany
Buckeye Technologies announced record sales for fiscal year 2012 even as its nonwovens business reported lower shipments. While total corporate sales increased 2% to reach $895 sales, the nonwovens division said sales were down from $264 million to $239 million for the year. Income within nonwovens decreased from $13.7 million to $11.7 million.
“Fiscal year 2012 was another year of record sales and earnings,” says chairman and CEO John Crowe. “During the year, we continued to generate significant cash flow, allowing us to invest in high rate of return capital projects, return cash to our shareholders through dividends and share repurchases and essentially eliminate our debt. With a strong operating performance and actions taken to address underperforming assets, we delivered a return on invested capital (ROIC) in fiscal year 2012 of 16.5%, well above our cost of capital. While Buckeye is well positioned to continue to increase shareholder value, we believe that global economic uncertainty may generate a headwind for us in fiscal 2013.”
As 2012 comes to a close, Buckeye will complete its plan, announced in June 2011, to close its Delta, British Columbia, Canada facility. When the closure was announced, Buckeye executives said the decision was made because it no longer made sense to operate the facility because of its unfavorable location relative to customers and raw material suppliers, as well as low capacity utilization. In 2010, the company had consolidated the site, which had been open since 1997, from a two-line operation to one, but this measure failed to make the facility cost effective.
Since the announcement was made, Buckeye has been transferring output from the Delta site. While some will go to Steinfurt, Germany, the bulk has gone to Buckeye’s plant near Charlotte, NC.
Once the Delta closure is complete, Buckeye will operate only two sites—one in North Carolina where it operates a massive line with a capacity of 50,000 tons per year and another in Steinfurt, Germany. Buckeye had operated a facility in Cork, Ireland but closed that site in 2004.
In more recent divestment news, Buckeye sold its Merfin converting business in January 2012 to National Tissue Company, LLC and sold its Cotton Linter Pulp production in Brazil in June. At the time of these sales, executives announced proceeds would benefit strategic operations.
While nonwovens has not seen full blown capacity expansion recently, the company remains intent on its growth. One area where the company is quite bullish is in the flushable wipes market. In 2011, Buckeye launched a flushable wipe substrate— AIRspun Flushable. This airlaid nonwoven substrate is designed for use in moist toilet tissue applications, a market Buckeye views as a strong growth prospect.
“AIRspun Flushable was designed to meet the performance criteria of our customers including the flushability guidelines set forth by the nonwovens industries associations in North America and Europe,” Crowe says. “Additionally, the product is made predominantly with our own fluff pulp cellulose from renewable materials, so it fits well with our continued sustainability efforts.”
Meanwhile, in personnel news, in July the company announced it was restructuring its executive management team following the announced resignation of president and COO Kristopher Matula, as well as the closure and sale of companies like Merfin.
Steven Dean, senior vice president and CFO, has been promoted to executive vice president, CFO; Douglas Dowdell, senior vice president, Specialty Fibers, has been promoted to executive vice president, Specialty Fibers. Terrence Reed, vice president, Human Resources, has been promoted to senior vice president,